The Massachusetts Juvenile Justice Pay For Success Initiative


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The Massachusetts Juvenile Justice Social Innovation Financing (SIF) Project with Roca, a Chelsea nonprofit, aims to reduce recidivism and increase employment for young men at high risk of re-offending. As a result, almost 1,000 young men from Boston, Chelsea, and Springfield will be offered counseling, life skills, vocational training, and transactional employment to change their behavior and avoid violence.

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The Massachusetts Juvenile Justice Pay For Success Initiative

  1. 1. The Massachusetts Juvenile Justice Pay For Success Initiative JUVENILE RECIDIVISM HAS CONTRIBUTED TO AMERICA’S RISE IN INCARCERATION RATE FOR YEARS The average prison sentence for young male ex-offenders in Massachusetts is The US has a growing number of incarcerated young people. Without intervention, high-risk young people face a reality of years in jail and prison. 2.4 years 64% go back to jail within 5 years 35% Only gain employment within a year INTERVENTION CAN ALTER THE TRAJECTORIES OF AMERICA’S MOST HIGH-RISK YOUNG PEOPLE In 2013, Roca served 469 high-risk young men ages 17-24. In Massachusetts, Roca, an outcomesdriven organization, combines relentless outreach with datadriven evaluation to produce consistent, positive outcomes for young people. Of the 115 young men already in the third phase (last two years) of the model: 69% 95% 89% had no new arrests had no new technical violations retained employment PAY FOR SUCCESS LEVERAGES PRIVATE CAPITAL AND REDUCES RISK FOR GOVERNMENT The government only pays back investors if certain outcomes are reached. The Commonwealth of Massachusetts is looking for new ways to solve problems while saving taxpayer dollars. The Commonwealth underwent a process to develop a first Pay for Success deal in Massachusetts that would serve as a pilot for future deals: Pay for Success is an innovative financing structure in which philanthropic and private investors provide up-front funding for a project and government only pays for successful outcomes. 1 2 3 Reviewed what social problems would be good ventures for first Pay for Success deal Evaluated and decided on juvenile recidivism Structured deal with Roca and philanthropic and private lenders THE INITIATIVE WILL EXPAND INTERVENTION TO 929 HIGH RISK YOUNG MEN Roca will serve approximately This $27 million, 7-year project is the largest financial investment of its kind and allows Roca to expand its high impact intervention, which aims to reduce recidivism and increase employment. Ages 17–23 At high risk of incarceration 929 In the probation system or exiting the Massachusetts Department of Youth Services young men SAVINGS FOR MASSACHUSETTS BASED ON REDUCED INCARCERATION RATES % Decrease in Total Bed Days = Savings Net of Pay for Success Payments The Commonwealth of Massachusetts will only pay a return if the program is successful. If there is no reduction in incarceration, the Commonwealth pays nothing. 55% = $7M 50 40 30 20 PAYMENTS TO LENDERS 10 At higher levels of success, all the philanthropic funding that is replenished will be recycled. Laura and John Arnold Foundation will use recycled funding to support future PFS initiatives. New Profit and The Boston Foundation will use recycled funding to support scaling of Roca. USD MILLIONS Government savings are based on a decrease in incarceration and an increase in employment. 70% = $18M 10% 20% 30% 40% 50% 60% 70% DECREASE IN TOTAL BED DAYS Source: PFS Factsheet INVESTING IN HUMAN CAPITAL The Massachusetts Juvenile Justice Pay for Success Initiative will serve as proof of concept that philanthropic and private dollars can be used to invest in not only physical infrastructure, but also human capital. Our hope is that future transactions modeled after this deal will draw more private sector capital to address other social problems: Education Income Security and Social Services Employment Workforce Development Public Health